What are the financial penalties in the Islamic Sharee'ah?

All perfect praise be to Allaah, the Lord of the worlds. I testify that there is none worthy of worship except Allaah and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

Financial penalties are prescribed in Islam in relation to wealth. The Muslim ruler or his deputy is entitled to apply such penalties. The wisdom behind imposing financial penalties is to ward off potential public harms that could affect the Muslim community. They are not meant to waste people's wealth. The evidence on the validity of imposing financial penalties is varied; we will cite only some of it:

1)      Taking half of the property of the person who refuses to pay Zakah as a deterrent to others. The Prophet, sallallaahu ‘alayhi wa sallam, said:

"For every forty camels, one bint laboon (a young female camel that is two years old and has already started the third year), is due as Zakah. No camel is to be separated from the rest of the camels (i.e. the jointly owned livestock as mentioned above). Whoever gives it willingly, seeking reward from Allaah, will be rewarded. (However) if someone refrains from paying it, it will be taken from him (by force) along with half of his property (as punishment), for it is a right of Allaah. None of it is lawful to the family of Muhammad." [Ahmad and others]

2)      The Prophet, sallallaahu ‘alayhi wa sallam, saw a person wearing a gold signet ring. He, sallallaahu ‘alayhi wa sallam, pulled it off and threw it away, saying: "One of you picks up a live coal and puts it on his hand." It was said to that person—after the Messenger of Allaah, sallallaahu ‘alayhi wa sallam, had left—"Take your signet ring and derive benefit from it." Thereupon, he said, "No, by Allaah, I would never take it back when the Messenger of Allaah, sallallaahu ‘alayhi wa sallam, has thrown it away." [Muslim]

3)      Imaam Maalik said:

"The Commander of the Believers ‘Umar ibn Al-Khattaab used to spill adulterated milk mixed with water as a disciplinary punishment for the owner. Allowing people to buy adulterated milk implies allowing mixing it with water and corrupting the markets of Muslims." [Al-Mudawwanah]

The Hanafi and Hanbali scholars—and others—adopted this opinion. Ibn Al-Qayyim said:

"Those who claim that the prescribed financial penalties were abrogated are accusing the soundness of the opinion of the (four) Imaams and are going against the Sharee'ah texts that they relied upon and the rulings that they deduced from them. The claim of abrogation cannot be easily proven because the rightly guided Caliphs and senior Companions imposed financial penalties after the death of the Prophet, sallallaahu ‘alayhi wa sallam. This fact serves as a refutation of the claims about abrogation. Those who allege that imposing financial penalties was abrogated do not have any evidence, neither from the Quran nor from the Sunnah. They merely depend on the opinion adopted by the school of Fiqh that they are following! The opinion of their school is, in their sight, the criterion of acceptance or rejection of any ruling!" [At-Turuq Al-Hukmiyyah]

Allaah Knows best.